TRG | The Bottom Line – 1/31

TRG spent part of this week with Worthington Enterprises (WOR) at NDR’s across NYC and Boston. TRG picked up coverage of WOR just over a year ago shortly after the spin from Worthington Steel, with this week’s NDR an opportune time to reflect on the past year as well as look ahead to where WOR is planning to go. Since the spin the stock price has had highs and lows, shooting up from ~$40 to a high of mid-$60s and has since retreated back to the low $40s. In many ways this is reflective of WOR’s headwinds that have clouded much of the past year (macro headwinds, low housing turnover, destocking, restructuring, parts of the business normalizing off of post COVID high levels, etc.) TRG believes much of these headwinds are over and the company now has a cleaner runway to operate off of, a theme that management touched on throughout the week. There are clear growth drivers (incremental M&A, slowly improving housing activity) and clear margin drivers (volume leverage, plant automation, cost optimization) for Worthington to execute on over the next few years. If you are a believer of U.S. reindustrialization to return to office, WOR is an “undiscovered” play into these themes.